Design considerations were first established by the Australian Payments Clearing Association (APCA) and representatives from industry - including Australia’s big four banks - in 2012.

Once live in 2016, the NPP will provide for the same-day settlement of bulk and direct payments, real-time retail payments, and the ability to finalise low-value payments outside banking hours.

By 2017, the RBA also proposes the NPP enable banks to ditch the ditch the BSB/account number system in favour of a single identifying number for receivers of payments.

The focus this year has been on choosing a solution provider for the basic infrastructure (switch and network components) and implementation of the system - which the APCA today announced would be Swift.

Swift has further outsourced a component of the solution - a proxy addressing lookup service - to financial services solutions provider Fiserv. This service allows for payment routing based on personal identifiers such as a mobile phone number or email address.

Swift will now work with the APCA and members of the NPP steering committee to detail the central solution and what system changes will be required for each of the 12 member institutions. This phase is expected to be completed in the third quarter of next year.

Australia’s big four banks are among the 12 current partners, alongside a number of smaller financial institutions which include ING Bank, Cuscal, Citigroup, Bendigo and Adelaide Bank and Macquarie Bank.

Former partners Bank of Queensland, HSBC, PayPal, Bank of America Merril Lynch and Suncorp all dropped out of the program during the last month.

Suncorp has similarly prioritised the replacement of its core banking platform

"We’re very supportive of innovation and greater efficiency in payments and our new banking platform, when complete, will be a chief ingredient in a new payments platform," a Suncorp spokesperson said

A PayPal spokesperson said the business was supportive of the NPP, but would look to leverage the platform through bank partnerships prior to deciding whether to directly participate, given "our business already enables real-time payments for our customers through bank networks".

An HSBC spokesperson said the company was also supportive of the platform and would formally sign up once it had determined its connection model.

Bank of America Merrill Lynch was contacted for comment.

APCA CEO Chris Hamilton told iTnews the project had the support of the major players - and therefore coverage of over 90 percent of bank accounts in Australia - meaning the smaller players could take their time to join the project.

Financial institutions provide a four-year funding committment to sign up to the platform, which is weighted based on the organisation's size.

He said some of the smaller players potentially concerned about cost may also take the option of teaming up with a similar-sized institution to share a secure gateway into the platform.

"If you're a direct connector, you will have a secure gateway into the network and you will control that, and all your interfaces will flow into that," Hamilton said.

"Each message that goes into and comes out of the system will designate a source of destination account, but it doesn't have to be a source of destination account within your organisation - it can be within another for which you are the desginated gateway."

Hamilton declined to provide the sign-up costs or the value of the Swift deal, but said combined with the internal costs for financial institutions to prepare their systems to connect to the NPP, over 12 years the project would surpass $1 billion.

"We're building a new piece of infrastructure that's going to be used for many years into the future," he said.

"We've nearly got critical mass. And in practical terms, those that don't currently connect will have to work out how they will connect in the next couple of years - they can't afford not to connect to something that everyone else has connected to."

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